ET trader interview | Technical analysis is no longer used to predict, but to restrain oneself

In EagleTrader trader interviews, we have come into contact with many traders who are good at technical analysis, and technology often plays an important role in their strategy systems.

In the communication with Lin Xianhao, we heard another voice – trading is not about predicting the market, but about managing one’s own behavior.

It is this kind of thinking that is different from “looking at the market” that allows him to gradually get rid of radicalization and instability, and establish a more sustainable trading method under the constraints of rules and disciplines.

But this understanding was not present at the beginning. Looking back on his trading experience, you will find that behind it, he actually went through a process of trial and error and self-correction.

Starting in instability

The way Lin Xianhao entered the trading market is not considered a “standard path”. He admitted that he had been in the trading industry for three years and had been involved in foreign exchange trading for one year. The period was not stable and his trading experience was intermittent. This kind of experience is not a continuous linear growth, but is closer to the real state of most traders – repeatedly confirming the direction through attempts, pauses and returns.

What supports him to stay in the market is not short-term profits, but the attractiveness of the transaction itself. In his opinion, trading is interesting but also cruel. He wants to prove himself in this market and even more wants to achieve freedom through trading. It is this quality of “coexistence of cruelty and possibility” that brings him back to the plate again and again.

The turning point in trading cognition

In trading decisions, Lin Xianhao does not rely too much on a certain analysis method. He clearly divided his decision-making weights: technical analysis accounts for 20%, fundamental analysis accounts for 40%, and intuition and experience account for 40%. The formation of this ratio stems from his re-understanding of technical analysis.

When he looked back on his growth path, he mentioned that he had learned a lot of technical analysis since he first came into contact with trading, but it was always good and sometimes not good. It was not until later that he gradually realized that technical analysis is only a kind of probability analysis. It is not used to predict the market, but to limit traders’ behavior. This transformation from “predicting the market” to “managing yourself” has become an important node in the maturity of his trading style.

When it comes to the key to long-term stable profitability, his answer is extremely restrained – light position + confidence. In his view, it is important to maintain an always optimistic confidence in trading, but the premise is that you should not go up after hitting the stop loss. Believe that you will always fight back, and do not rush to take heavy positions and form a gambling mentality that will lead to continuous losses. This restraint,It’s a sign of his growing distance from emotional trading.

Exhibition of mature trading behavior

Lin Xianhao’s trading style is not static. The most recent significant adjustment occurred when he took the preliminary examination. He admitted that the last time he made major changes was when he took the first test. His previous trading was very aggressive. After taking the test, he learned the rules and his positions became smaller, and he was able to wait more patiently for opportunities. The rules did not restrict him, but made the trading rhythm more controllable. In the future, he also hopes to improve the profit-loss ratio to be more reasonable.

In terms of reducing the “luck factor”, his approach is equally simple but effective – adhere to trading discipline, make a trading plan before trading, and strictly adhere to the stop profit and stop loss after placing the order. For him, luck is never achieved through avoidance, but through process management.

When extreme situations arise, his handling is particularly decisive. If he encounters a large loss in a heavy position, he will choose to close the position directly, because in his opinion, a heavy loss in a heavy position means that the market has not given feedback on what he thinks is a good trading opportunity, so it is better to close the position directly and wait for the next trading opportunity. When a heavy position is profitable but encounters a significant retracement, he will first reduce the position and then move the stop loss line above the cost line to ensure that there is profit or no loss.

In terms of risk allocation, he set clear boundaries for himself: assuming that the risk he can bear is 100 points, each transaction only takes up 10 points of risk on average. He does not deny that high risks may bring high returns, but he is also clearly aware that greater risks may also lead to greater losses.

As for the repair cycle after a retracement, his experience is that it will return to the highest point in an average of four or five trading days. The key is that after a retracement occurs, you must be stable and not rush back.

Establish consistency in rules

In Lin Xianhao’s view, transaction consistency is not mechanical repetition, but always following one’s own principles. He believes that transaction consistency refers to transactions made in compliance with one’s own trading principles and entry and exit principles, and one will not place random orders due to impulse such as increasing the number of opening positions or betting on market data. When he finds that his strategy deviates, he is more likely to pause, not do it yet, observe the market, and find a market trend that suits his strategy before doing anything.

His biggest gain from participating in the exam this time is not the result, but the process itself – restraining his trading discipline and using light positions to trade to stabilize his mentality. The rules serve as a mirror to help him see his trading behavior clearly.

For traders who have just signed up, his advice is equally straightforward and pragmatic: stop losses strictly, don’t rush to pass the exam, learn to standardize your trading behavior in the exam, and look for trading opportunities in the rules.

From the initial intermittent trading experience to the gradual understanding of probability, position and discipline, Lin Xianhao gradually formed a more stable trading rhythm during the EagleTrader assessment process.

For traders, what matters is never just the one result, but the gradual establishment of a sustainable and replicable trading behavior system based on rules and self-discipline. ——And this is where professional trading really begins.